How marketing could be structured at a AB InBev / SABMiller mega brewer

Dubbed ‘Megabrewer' by the beer industry, AB InBev began talks to acquire SABMiller for $122bn earlier this month. A consolidated “megabrewer” would have the marketing and distribution might to be more aggressive in its product promotion in mature markets and equally aggressive in opening newer markets. But the deal wouldn’t come without its casualties.

AB InBev’s heavyweight, big-budget national campaigns are at odds with the more measured, localised efforts of SABMiller. And from a strategic perspective, plans devised for the likes of Budweiser and Stella Artois are more quantitative driven than their SABMiller-owned counterparts due to the influence of the private-equity firm 3G Capital.

A closer look at the marketing for AB InBev’s Stella Artois and SABMiller’s Peroni highlights their conflicting approaches to brand building but also opportunities for brand development. Even with years of investment in quality messaging, the ultra competitive premium beer market still seems to see Stella Artois’ multi pack formats being red-ticketed in supermarket aisles. Compare this to Peroni’s nuanced, confident, traditional advertising; it may lack the big media and activation budgets (for now) of its American and Belgian cousins but the brand still feels Italian ad more importantly premium.

It’s a chance for Budweiser to learn from a fresh approach to brand building, particularly in developing markets across the globe, and Peroni to broaden its marketing repertoire

Alcohol owners are increasingly aware they need to mend the disconnect between how their brands need are advertised and sold to consumers more open to experimentation. More than ever, the mature beer markets are full of consumers who aren’t clearly defined mainstream beer drinkers, making provenance and content more potent components of a beer marketing plan.

Speaking to The Drum Matthew Bennett, creative partner at ZAK, which develops campaigns for Magners, said that he will be keeping a close eye on what could happen to the handful of top brands for each: Stella and Bud for ABInbev, and Peroni, Pilsner Urquell and Meantime, for SAB Miller.

“I’ve picked those out deliberately to make a comparison between the behemoths of Stella and Bud, [which are] truly global brands. And wow don’t they feel it with the budgets to force their way into your consciousness, long ago having lost any sense of real home place, versus brands that just seem to feel a lot more authentic.”

The challenge then, will be for the two brewers not only align their brand strategies but to also build an umbrella portfolio strategy to allow the two companies to co-exist without overshadowing the other, in everything from brand advertising to channels and distribution.

“This merger, if successful, will also provide AB InBev and their brands with unparalleled access to the wealth of expertise held by SABMiller in building brands in developing markets across the globe,” said Brand Union’s managing director Jonny Westcar.

“Equally, it is interesting to see how the amalgamation of these corporations will settle within a marketplace whose growth is currently driven by the influence and innovation of small scale craft brewers. With the recent backlash globally to Heineken’s purchase of US craft beer maker Lagunitas, could this new conglomerate risk seeing drinkers shun corporate domination?” he added.

There’s also the prospect of the prospective ‘megabrewer’ impacting agencies. Existing deals could end and new ones formed as they have done in similar situations for the recently-formed Kraft Heinz Company and Mondelez following its spin off from Kraft in 2012.

“As an agency owner, I’d want a brief to rediscover how to make punters feel Stella and Bud, the same way that I feel Peroni and Urquell,” said Bennett. “And incidentally, I’d exit football: there are so many better brands, better placed between those two brewing big boys to authentically claim a stake in the world’s biggest game.”

AB InBev’s purchase of SABMiller has been rumoured for some years but never materialised, most likely because of the debts taken on by the former to fund its acquisitions over the last five years. Should it be given the green light to go ahead, it could give AB inBev control of almost one third of global beer volumes. It could open up opportunities for rivals Heineken and Carlsberg, given SABMiller’s stake in Miller Coors would probably need to be sold in order to appease competition regulators. Alcohol experts have predicted Carlsberg and Heineken would likely swoop for any major assets should the “megabrewer” deal actually happen.